Calculate profit margin and markup, or reverse-engineer the right selling price from a target margin.
Enter your cost
Input the cost of goods — your landed cost per unit including product, freight, and import duty.
Enter your selling price or target margin
Either enter a selling price to calculate the margin, or enter a target margin % to find the minimum selling price.
Review margin and markup
See your gross profit margin (%) and markup (%). Gross margin % is the key metric for e-commerce — aim for 50%+ to cover platform fees and still profit.
Factor in platform fees
Remember to account for Amazon/Etsy/Shopify fees separately. The margin shown here is before platform commissions.
Margin is profit as a percentage of the selling price. Markup is profit as a percentage of the cost. Example: cost $10, price $25 — margin is 60% ($15 profit ÷ $25 price), markup is 150% ($15 profit ÷ $10 cost). Most e-commerce sellers think in margin.
Amazon sellers should target at least 50% gross margin before fees. Amazon's referral fee (typically 8–15%) + FBA fee ($3–$10+) can eat 30–40% of revenue on low-priced items. After fees, you want at least 15–20% net margin to have a sustainable business.
A healthy gross margin for e-commerce is 50–70%. This leaves enough room to cover platform fees (15–25%), shipping (5–15%), and advertising (10–20%) while still generating profit. Below 40% is challenging to sustain after all operational costs.
Use the formula: Sell Price = Cost ÷ (1 - Target Margin). Example: cost $10, target margin 60% → Sell Price = $10 ÷ 0.40 = $25. This ensures your margin is exactly 60% at that price.